The business and culture of our digital lives, from the L.A. Times

China dethrones U.S. as world's largest PC market

China passed the U.S. as the largest market for personal computers in the second quarter, according to new data from a research group.

The shift marks the first time that China has passed the U.S. as the top consumer of PCs.

PC shipments in China hit 18.5 million units worth about $11.9 billion in the April-through-June quarter, which edged out U.S. shipments of 17.7 million units worth about $11.7 billion, according to International Data Corp.'s Worldwide Quarterly PC Tracker study.

China accounted for 22% of the world's PC market in terms of shipments, while the U.S. took up a 21% share, the International Data said in a report. In the U.S. PC sales fell 11% in the first quarter from a year earlier, according to IDC data, marking the nation's largest drop in nearly a decade.

Although China passed the U.S. in the second quarter, International Data said it expected the U.S. to remain on top for the full year.

"On a full-year basis, IDC still expects the U.S. to remain the largest market in 2011, with 73.5 million units forecast to be shipped in the U.S. versus 72.4 million in China," the research group said. "Similarly, holiday season buying in the U.S. will likely keep it ahead of China in the fourth quarter, especially as China's market contracts after its third quarter summer promotions."

International Data said it doesn't project China to pass the U.S. in annual shipments until 2012, when 85.2 million units are forecast to be shipped in China and 76.6 million units in the U.S.

The data show something manufacturers have expected for some time (and something we've been following in our reporting) -- that sales of tablets will eclipse those of laptops in the U.S. as soon as next year and that they will eventually overtake PC sales.

Last week Hewlett-Packard Co., the world's top PC maker, announced that it was considering getting out of the PC business altogether by either selling off its PC unit, or spinning off the unit into a standalone company.

But, unlike many other hardware makers, HP said it was giving up on tablets and smartphones as its future for growth, discontinuing its line of devices running its WebOS operating system.

HP says it is exploring its options with WebOS and could end up licensing the software to other tablet and phone makers.

But while China is experiencing a PC upswing and the U.S. is seeing its PC market shrink, there are still risks ahead for China, such as inflation and possible negative effects from the unstable economic conditions in the U.S. and Europe, said Kitty Fok, International Data's vice president for greater China research, in a statement.

"China's lead in the PC market is a huge shift that reflects the rising fortunes of emerging markets as well as the relative stagnation of more mature regions," said Loren Loverde, International Data's program vice president for its Worldwide PC Tracker research, in a statement. "While the immediate economic circumstances in the U.S. and other markets had a significant impact on the timing of China's move to the lead, they have not changed the trend, but accelerated it."